New Report Reveals Strong Enterprise Appetite for Chat Bots

Market-leading research & consulting company Ovum published a report on B2C communications market. The report reveals a growing business appetite for more interactive forms of enterprise messaging, including two-way SMS, enhanced SMS such as messaging based on the Rich Communications Standard and Chat bots. The Enterprise Messaging Survey 2017 was conducted in partnership with Swedish cloud communications provider CLX Communications and their subsidiary mobile solutions provider Symsoft.

The Survey, canvassed 100 companies in 7 countries around the globe, forecasts that there will be 3.18 billion unique global mobile monthly active users (MAUs) of chat apps by 2020, many of whom will use two or more chat apps. A large share of those users are based in Eastern and Southeastern Asia, where the China-based WeChat is very popular. WeChat reported 938 million monthly unique users as of 2Q17. In other regions, both Facebook Messenger and WhatsApp exceeded 1.2 billion MAUs in 1Q17, while Instagram (also owned by Facebook) reached 700 million MAUs. India is WhatsApp’s largest market, with 200 million MAUs as of February 2017.

This data confirms our findings at Arctic15, which demonstrated that 1 out of 4 startups in the Nordics and Baltics focus on AI, while at the same time, over half of AI companies are building some sort of a smart chat bot.

A quarter of enterprises are using chat bots to connect with their customers

The Enterprise Messaging Survey 2017 found that 25% of respondents organizations are already using chat bots to engage with their customers, and had already measured improvements in customer service and revenues. Mostly, the chat bots are used to automate customer interactivity with specific demographic groups such as millennials.

Even though chat bots on chat apps have been around for only a relatively short time – several chat apps, including Facebook Messenger, Kik, Line, Telegram, and Skype launched them only in 2016 – 84% of respondents said they have already deployed chat bots across chat apps. Chat bot capabilities on some social network and social media sites are even newer – for example, Twitter launched new chat-bot-powered features in its Direct Messages function in November 2016 – but the survey suggests that these have also quickly gained traction, with 76% of respondents indicating that their organizations have deployed chat bots on social networks and social media.

Improving the customer experience drives use of chat bots

When Survey’s respondents were asked why their companies had deployed chat bots, most indicated that their key objectives were to improve customer service, including customer self-service. For instance, 96% of respondents said that they used chat bots to provide their customers with easier access to content and services, 92% said they used them to automate customer-facing functions, and 88% indicated that they used them to help improve customer service and reduce churn.

Companies use chat bots to automate the way in which consumers can access information, receive alerts about specific events, confirm or reschedule an appointment, or provide customer support, among other functions. This means that consumers’ interactions with their service providers can be quicker, more efficient, and more personalized, assuming that the automation is effective, relevant to the consumer, and hassle-free. Cost reduction was also on the minds of respondents, with 84% stating that their organization used chat bots to reduce back-end costs, and 72% indicated that they felt chat bots were cheaper and more effective than developing and distributing an app.

The survey results suggest that among those respondents whose organizations have deployed chat bots, there is a high likelyhood to deploy more than one chat bot. Clearly the fact that these enterprises have measured significant business benefits from their deployment of chat bots in at least one area of their business has encouraged them to attempt to replicate that success either with other products and services in the same business unit, or in other business units.

Chatbots come with challenges

Just like apps, chat bots are inherently user-initiated, which forces organizations to make customers aware that they are offering a chat bot, and to educate consumers about how they can access and use it. This means that SMEs especially may find it initially more difficult to develop, deploy, and support chat bots, owing to the investment and expertise that is required.

However, the combination of chat bots with artificial intelligence in the form of machine learning and deep learning, which is delivered to the consumer as a chat-app-like experience, creates an environment for the development of innovative services. In turn, innovative and useful chat bot experiences should drive user adoption, ultimately resulting in increased value for the enterprise, according to the survey results.

Valerie Vlasenko is a space journalist tackling the dilemma of popularising space. Founder of VSpace Media and an Editor at ArcticStartup - Valerie has rich experience as an entrepreneur, a journalist and a space lawyer.